Product value in the property sector

We take a look at the property sector in this first instalment of our series exploring how ancillary insurance categories can deliver value in the time of Covid-19.

The latest FCA ‘Product value and coronavirus’ guidance emphasises that, especially now, insurance products should always add value, and this value must be transparent for the consumer.

Under these guidelines insurers and intermediaries are expected to consider whether and how their product value has been materially affected by coronavirus, including assessing any changes to product utility and/or the fulfilment of contractual benefits.

CPP Group UK’s compliance manager Stacey Woodgates explains that “CPP’s innovative culture naturally involves a thorough review process that focuses on making continuous improvements to ensure our products deliver the best customer outcome. Operating in a regulated market, CPP carries out regular reviews to certify our products ensure value and meet all regulatory requirements for the benefit of consumers and this is even more important in the current environment.”

Covid-19 has undeniably added complexity and challenge to almost every aspect of life – including in the property sector. May saw mortgage approvals slump to their lowest level since records began in 1993. Recent weeks have seen experts expound more positive forecasts, helped undoubtedly by the introduction of the stamp duty holiday in July.

Yet, while lockdown measures continue to ease gradually, our relationship to our homes – and risk – may well have permanently changed. After months spent at home, as well as a wide-scale shift in professional habits that has seen up to 26% of people announce their intention to pursue home-working in some capacity beyond lockdown – the importance of protecting existing assets and mitigating risk is clearer than ever to customers. We are seeing a ramp-up of activity across the home insurance industry, with an increased uptake in quotes as well as a rising number of claims – exponentially so, in the case of accidental damage losses.


In our own business we have seen claims on appliance warranty products increase substantially during the months of lockdown. Whilst many customers were initially asking for non-urgent repairs to be delayed, we can see customers are now comfortable to seek help for faulty appliances they may have been living with some months. For insurers, having good quality Covid-19 bio-security measures is an important part of ensuring customers are comfortable accessing the value in their product.

Slightly less clear is the effect of remote working on home insurance policy cover; recent findings suggest that 43% of people with home insurance are uncertain about the impact of lockdown on their policy cover. With a shift in governmental guidance on remote working at the beginning of August and the boundaries on what constitutes business and personal insurance becoming further blurred, it is increasingly imperative for brokers to clearly and transparently communicate any limitations or restrictions of cover to their clients.

Such extraordinary changes in customers’ circumstances necessitate a similar flexibility on the part of insurers. Distributed via insurance brokers, there is potential for ancillary insurances sold alongside property insurance to enable intermediaries to respond in targeted ways to their clients’ most current requirements relating to the home, and provide very tangible and immediate customer value when critical day-to-day items in the home are lost or fail. Recent months have seen the need for flexibility emerge, making ancillary insurance a key vehicle for delivering on customer demands and needs and thereby potentially helping in satisfying the requirements set out under the Insurance Distribution Directive (IDD).

In the property sector specifically, with more time at home and more frequent use of valuable home appliances, protecting these devices becomes ever more important. Products like Appliance Warranty prove an apt add-on: the policy, which covers the replacement or repair of home necessities under the insured circumstances, can help customers to get quickly back on track when problems arise.

Covid-19 has brought exceptional challenges that need not be made more stressful by “sweating the small stuff”, such as losing your keys. Brokers can help to ease pressure on customers by looking to ancillary insurance like CPP’s Key Insurance offering – products that deliver practical assistance and real value in a time of real need.

If recent events have taught us anything, it’s what we have to lose. Ancillary property products enable brokers to offer vital reassurance and value to homeowners amid the current uncertainty by responding flexibly and effectively to their most immediate priorities – priorities that for many have shifted, as homes double up as offices and places of work. These products can be seamlessly integrated into existing property insurance propositions and enrich the customer journey by addressing real customer needs.

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